BSkyB fires first shots in fight for TV rights

Friday 29 October 1999 23:00 BST

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REPORTS THAT the satellite broadcaster BSkyB has attempted a pre-emptive strike ahead of next year's battle for televised football rights have come as no surprise to media industry watchers. Yesterday's Financial Times carried news of an "informal bid" of £1 billion to the FA Premier League from BSkyB to retain exclusive rights when its present £670m contract runs out in 2001.

REPORTS THAT the satellite broadcaster BSkyB has attempted a pre-emptive strike ahead of next year's battle for televised football rights have come as no surprise to media industry watchers. Yesterday's Financial Times carried news of an "informal bid" of £1 billion to the FA Premier League from BSkyB to retain exclusive rights when its present £670m contract runs out in 2001.

The company played down the story, issuing only a one-line statement in response, but city analysts believe the first shots have been fired in a bidding war that is expected to see BSkyB and BBC face a vigorous challenge from ITV to regain live televised football, with new players ONdigital and the cable giants NTL entering the fray.

The report said the broadcaster had approached the chairmen of two leading clubs with the offer. BSkyB responded by saying simply that "negotiations with the Premier League have not started on the next contract". However, the timing of the story fits in with predictions of how the scramble for the new contract will unfold.

"I don't suppose there is a bid on the table," Matthew Horsman, a research analyst with Investec Henderson Crosthwaite, said. "But you can say that the whistle has blown for the beginning of the game.

"Formal negotiations are due to begin next year and if you look back at the history of the existing deal you will see that the jockeying for position began more or less this far ahead of the contract being signed."

The figure of £1b for a three-year deal is thought to be an inflated estimate but the clubs can still expect to see their income from TV rise substantially again, especially with pay-per-view and internet rights likely to form separate deals.

"Something like £750m over three years for subscription or network rights might be nearer the mark," Horsman said. "On top of that there will be highlights, pay-per-view and new media."

BSkyB won the rights to live football in 1992 when its bid of £466m over three years was accepted by one vote over ITV's offer. The satellite broadcaster kept the rights in 1996, when it went to £670m for a four-year contract that began in 1997-98, with the BBC paying a further £73m for highlights. BSkyB retained pole position this year when the Restrictive Practices Court threw out an Office of Fair Trading's complaint that the Premier League has been acting as a "cartel" in centrally agreeing its TV deals.

ITV has already promised to "punch its weight in the market" in its attempt to prise the rights back, while ONdigital and NTL, and perhaps Channel Four and Channel Five, are no less determined. But BSkyB will not relinquish its hold easily.